Rethinking the Board of Directors: Getting Outside the Box
74 The Business Lawyer 285 (2019)
13 Pages Posted: 18 Dec 2018 Last revised: 18 Sep 2019
In our new book, Outsourcing the Board: How Board Service Providers Can Improve Corporate Governance, Todd Henderson and I change the conversation about corporate governance by examining the origins, roles, and performance of boards with a simple question in mind: why does the law require governance to be delivered through natural persons? Through tracing the development of boards from quasi-political bodies to the current 'monitoring' role, we find the reasons for this requirement to be wanting. Instead, we propose that corporations be permitted to hire other business associations—known as 'Board Service Providers' or BSPs—to provide governance services. Just as corporations hire law firms, accounting firms, and consulting firms, so too should they be permitted to hire governance firms, a small change that will dramatically increase board accountability and enable governance to be delivered more efficiently.
This essay will serve as the introduction to a forthcoming symposium about our book.
Keywords: board of directors, outsourcing, corporate governance
JEL Classification: K22
Suggested Citation: Suggested Citation